Malta, the New Offshoring Destination for Binary Options

A small island republic in the Mediterranean Sea just south of Sicily, the republic of Malta has never been a beacon destination for the financial services industry until its accession into the European Union (EU) in 2004. Ever since then, this tiny island republic have been experiencing high growths especially its financial services sector.

Over the last few years, binary options and forex trading companies as well as numerous insurance companies have been setting up shop in Malta. A big attraction about Malta as the operational center for these companies is largely due to the harmonization of the EU’s . Because of the Markets in Financial Instruments Directive (MiFID), companies regulated by one EU member country enjoy “passporting” rights within the entire EU financial markets.

A Move From Cyprus to Malta

While it is undeniable that the focus by the European financial industry had been on the Republic of Cyprus as the prime destination for offshoring , Malta have also recently started to gain attention from the European financial industry on its own. The financial services sector is seen by the Maltese government as a primary driver for the growth of the country’s economy. In fact, while the rest of Europe had been experiencing recession during the last few years, Malta’s economy had continued to grow at a brisk pace.

Why Malta for Binary Options Brokers?

maltaWith a low inflation rate of just 1% and an average GDP growth rate of 2% (2013), the Maltese economy has been regarded as one of the most stable and resilient within the EU helping to boost its sovereign credit ratings among international rating agencies. In fact, Standard & Poor’s recently reaffirmed Malta’s credit rating at BBBplus/A-2 citing Malta’s strong economy and its institutional as well as governance prudence.

“We could raise our ratings on Malta if the government’s reform program boosts growth and reduces the government debt burden more quickly than we currently expect, without a return to current account deficits. Conversely, we could lower our ratings on Malta if fiscal slippages raise the government’s debt burden and the country’s net external liabilities.” said a spokesperson for S&P.

As noted by S&P, much of Malta economic growth can be attributed to the country’s robust financial regulatory framework as well as the innovative approach taken by the Malta Financial Services Authority (MFSA). With the proactive manner which the MFSA review existing regulations and propose new ones, the MFSA had been able to avoid coming up with ineffective or redundant regulations. Together with a stable economy and productive workforce, it is likely that over the next few years we will hear of more financial services companies setting up shop in Malta.

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